Comcast Corp. says it has developed an online video player that gives viewers a TV experience on the Internet, and the cable giant intends to put shows and movies from 24 cable networks online by the end of 2009.
But it won't be free, which is what most people have come to expect of content on the Internet.
Comcast cable customers - about 24 million in the United States - will have sole access to the cable TV fare through an online password and authentification process that references Comcast customers' billing records.
About 5,000 Comcast cable customers tested On Demand Online this summer. Comcast says it will expand the service, which customers will use through the Fancast.com and Comcast.net Web sites, to all its subscribers by Jan. 1. The company will e-mail customers to tell them when the service goes live.
Comcast chief executive officer Brian L. Roberts today updated the media and industry officials on the new service at the Web Summit 2.0 gathering of technology executives in San Francisco.
In Philadelphia, Comcast executives discussed the project, which was initially announced in June with Time Warner Inc. and was called at that time TV Everywhere. "All the metrics are good, and we are just getting started," said Madison Bond, Comcast's executive vice president of content acquisition.
Comcast has negotiated deals with content providers to make the entertainment available on the Internet. Those participating include Time Warner, Starz, CBS, and the Discovery Channel. Bond said that Comcast was still securing programming rights for additional cable TV and movie content for the Internet.
Comcast views On Demand Online as an extension of a cable package for customers and allows entertainment companies new sources of online advertising. Bond declined to discuss programming deals.
Alix Cottrell, vice president at Fancast.com, said Comcast developed the online video player with an outside firm.
Through a special bit-streaming technology, the player smooths out the jerky movements of other online players by slightly altering the brightness of the TV picture when there are problems with Internet speeds.
Executives in the cable industry fear that if they do not move quickly to put more entertainment and news online, hackers could begin posting pirated entertainment and news on the Internet and undercut the cable TV business model - which is what happened to the music industry.
Comcast executives also are vehement about not putting entertainment and news online for free.
With On Demand Online, Comcast customers view only those cable TV networks in their individual cable TV packages. Thus, customers who purchase HBO or Cinemax on their cable TV can view HBO and Cinemax on their computer. But if they do not purchase HBO or Cinemax in their Comcast cable package, they cannot get it online.
Comcast's project to exploit the Internet comes as Wall Street analysts are speculating how cable companies will deal with Internet video. The big threat is that customers will cancel their cable TV service, although cable executives and others say they believe online video can be complementary to cable TV services and boost revenue through new advertising.
Industry experts have said that online video may be one reason that Comcast is negotiating to purchase NBC Universal Inc., one of the nation's largest movie and TV studios.
Comcast is in advanced talks with General Electric Co. to acquire a 51 percent stake in NBC Universal. The deal includes provisions for Comcast's eventually buying all of NBC Universal.
By owning the Hollywood entertainment, Comcast can control the flow of entertainment to the Internet, some contend.